(a) In lieu of subsections (b), (c), (d), (e), and (f) of section 849, with respect to open-end loans, a licensee may provide credit insurance with the borrower’s consent, in a form to be approved by the Board, in an amount not in excess of the amount of the indebtedness. For credit life or disability insurance, the licensee may collect from the borrower any amount established by the Virgin Islands Insurance Code or regulations.
(b) If life insurance is provided, and if the insured borrower dies during the term of the loan contract, the insurance must be sufficient to pay the total amount due on the loan outstanding on the date of borrower’s death, without any exception, reservation, or limitation.
(c) If disability insurance is provided, and if the insured borrower becomes disabled during the term of the loan contract, the insurance must be sufficient to pay all amounts attributable to the loan balance at the time of commencement of disability that subsequently become due on the loan thereafter during the period of disability, in accordance with subsection (d) of section 850, without any exception, reservation, or limitation.
(d) If loss-of-income insurance is provided, and if the insured borrower becomes unemployed during the term of the loan contract, the insurance must be sufficient to pay all amounts attributable to the loan balance at the time of commencement of unemployment in accordance with subsection (d) of section 859 without any exception, reservation, or limitation.
(e) Any credit insurance that is provided must be in force as soon as the loan is made, or coverage is agreed upon, whichever is later. No credit insurance written in connection with an open-end loan may be canceled by the lender because of delinquency of the borrower in the making of the minimum payments thereon unless one or more of the payments is past due for a period of 90 days or more, and the lender shall advance to the insurer the amounts required to keep the insurance in force during that period, which amounts may be debited to the borrower’s account.
(f) This section does not apply to any open-end loan of a bona fide principal amount $5,000 or more as determined in accordance with section 906.